If Pain, Yes Gain – Part 119: Potential New York City Paid Sick Leave Private Right of Action Looms

What You Need to Know:

• On December 20, 2023, the New York City Council passed legislation that would create a private right of action to enforce the Earned Safe and Sick Time Act ("ESSTA").
• If the legislation becomes law, it would allow employees who allege a violation of ESSTA to bring forward a civil action in court, in addition to filing a complaint with the City’s Department of Consumer and Worker Protection ("DCWP").
• New York City Mayor Eric Adams has until January 19, 2024 to sign, veto or take no action on the legislation. If the legislation is not vetoed by that date, it becomes law and would go into effect 60 days later, i.e., by no later than March 19, 2024.

Background

The original version of ESSTA, which at the time was known as the New York City Earned Sick Time Act, took effect on April 1, 2014.  The ordinance mandates that covered employers provide eligible employees with a certain amount of paid time off for certain absences, including to care for themselves or a qualifying family member.  Under the original version of ESSTA and as is currently the case, employees who alleged their employers violated ESSTA could only bring a claim by filing a complaint with the DCWP. In fact, the public-facing ESSTA FAQs, which were last updated in November 2020, state the following about employees’ entitlement to a private right of action.

Q: Does the Law authorize employees to bring an action in court to enforce their rights?

A: No. The Law does not give employees the right to initiate actions in court to enforce their rights under the Law. However, employees retain any other rights they may have under other local, state, or federal laws.

Since its enactment, ESSTA, its implementing Rules, and supporting FAQs have been amended several times.[1] Most recently, on October 15, 2023, the latest final amendments to ESSTA’s Rules (“Rules”) took effect.[2] The final amendments address several important ESSTA topics including, but not limited to: (1) clarifying the employer size when determining obligations under ESSTA; (2) clarifying employee eligibility when determining ESSTA coverage where employees work remotely and in-person within New York City; (3) fractional accrual of earned safe and sick time (ESST); (4) providing a non-exclusive list of examples of what is considered reasonable notice procedures when the need for ESST is foreseeable; (5) clarifying what constitutes reasonable written documentation from a licensed health care provider under ESSTA; (6) reiterating the balance notification requirements of ESSTA and providing guidance on the use of an electronic system to comply with these requirements; (7) clarifying the meaning of “regular rate of pay” under ESSTA; (8) important information on ESSTA written policy requirements; and (9) expanding the scope of potential penalties that can be enforced against employers alleged to have violated ESSTA or the Rules.

Private Right of Action

On December 20, 2023, the New York City Council passed legislation that would once again amend ESSTA. The specific legislation, which as noted above is awaiting action from Mayor Adams, would allow employees to file a civil lawsuit against their employer for violating ESSTA, in addition to filing a complaint with the DCWP.  The legislation would allow employees to file a civil action within two years of the date they knew, or should have known, of the alleged ESSTA violation. There is no prerequisite that employees would first need to file a complaint with the DCWP, nor would it be a bar to first file a complaint with the DCWP before commencing a civil action. Further, there is no requirement that a civil action must be brought before the DCWP investigates, as the legislation does not affect the DCWP’s authority to open an investigation.

If a complaint is first filed with the DCWP, upon commencement of the civil action, the DCWP will stay the investigation until the civil action is either withdrawn or dismissed without prejudice.  If the civil action results in a final judgment or settlement, the DCWP will dismiss the administrative complaint, unless the DCWP finds that the alleged violation was not resolved by the judgment or settlement. Within 30 days of the date that the time for appeal has lapsed, the complainant must notify the DCWP that such complaint is withdrawn, dismissed without prejudice, or resolved by final judgment or settlement.

Under the legislation, employers facing an ESSTA civil action may be subjected to compensatory damages, injunctive and declaratory relief, attorney fees, and any other relief that the court deems appropriate. Under the proposed amendments, the compensatory damages that would be available under the new private right of action would include certain relief currently available as part of a DCWP investigation. This includes, but is not limited to:

• for each instance of ESST taken by an employee but unlawfully not compensated by the employer: three times the wages that should have been paid or $250, whichever is greater;
• for each instance of ESST requested by an employee but unlawfully denied by the employer and not taken by the employee or unlawfully conditioned upon searching for or finding a replacement worker, or for each instance an employer requires an employee to work additional hours to make up for the original hours during which such employee is absent without the mutual consent of such employer and employee: $500;
• for each instance of unlawful retaliation or interference not including discharge from employment: full compensation including wages and benefits lost, $500, and equitable relief as appropriate; and
• for each instance of unlawful discharge from employment: full compensation including wages and benefits lost, $2,500, and equitable relief, including reinstatement, as appropriate.

The legislation also includes a revision to the scope of civil penalties that employers may be subjected to when facing a DCWP investigation. Today, ESSTA states that certain violations can trigger a civil penalty payable to the City, in addition to other remedies, which ranges from $500 to $1,000 per employee. The legislation would expand the scope of these penalties such that they could be imposed on a per employee, per instance basis.

Next Steps

We will continue to monitor this legislation as the January 19, 2024 deadline for Mayor Adams to sign, veto, or take no action approaches. We also will continue to monitor the DCWP’s ESSTA website for additional paid sick leave developments in New York City, including updated FAQs. Updates will be provided as applicable.

With the paid leave landscape continuing to expand and grow in complexity, we encourage companies to reach out to their Seyfarth contact for solutions and recommendations on addressing compliance with these laws and paid leave requirements more generally.  To stay up to date on paid leave developments, please click here to sign up for Seyfarth’s Paid Leave mailing list.  Companies interested in Seyfarth’s paid sick leave laws survey should reach out to paidleave@seyfarth.com.

 

[1] For additional details on ESSTA, see our prior Legal Updates here, here and here.  

[2] The ESSTA website currently states that the DCWP “will update the FAQs to reflect new Rule amendments that took effect on October 15, 2023. Please continue to monitor this page.”